With flags, balloons and firecracker explosions, and the smoke and smells of street cooking, tens of thouands of Paraguayans have just taken part in one of those rare but memorable moments in Latin American history when the people are allowed to express a hope for change. Assembled in the great open space beside the River Paraguay, bequeathed by the imaginative urban planners of the Spanish colonial era, the supporters of Fernando Lugo, the former Catholic bishop now standing as a leftist presidential candidate in the elections on Sunday, listened to a series of musical acts from all over the continent before receiving some final words of encouragement from Lugo and his running mate, Federico Franco, from the Liberal Party.

For long the largest opposition party in Paraguay, the somewhat conservative Liberals have never managed to secure a majority during the 20 years of limited democracy the country has enjoyed since the downfall of General Alfredo Stroessner in 1989. Now they have allied themselves to the colourful former bishop and his "Patriotic Alliance for Change" of mainly leftist parties, in the hope that this time they can defeat their old enemy, the Colorado Party, in power for more than 60 years. Opinion polls over recent months have consistently put Lugo in the lead, and the crowds at his final rally clearly scented an impending victory on Sunday, with the prospect of Paraguay joining the list of leftist governments that have emerged throughout the continent in the 21st century.

Franco spoke of the need to recover Paraguay's sovereignty, an allusion to the hydro-electric dam at Itaipu that its shares with Brazil. Paraguayan nationalists believe that they get a raw deal from a treaty signed more than 30 years ago by two military dictators. Lugo began his speech in Guarani, and talked of the need to include the indigenous population in the government's future plans. "We are all equal in the independent republic of Paraguay", he said, in a voice grown hoarse after three months campaigning up and down the country. He also recalled his time in the Catholic Church, remembering the important meetings at Medellin and Puebla when the Church famously declared itself in favour of "the preferential option for the poor", the slogan of the supporters of liberation theology.

Blanca Ovelar, the personable woman put forward by the Colorados (in the steps of Michelle Bachelet of Chile and Cristina Fernandez de Kirchner of Argentina), also held her final meeting this week, in the same place and with marginally smaller crowds, and less music. An experienced politician and a former minister of education, she has a powerful electoral machine behind her, accustomed to buying its way to power and to cheating when necessary. The newspapers, several moving behind Lugo in recent weeks, are filled with stories about innumerable dead voters on the electoral rolls.

The third significant candidate, Lino Oviedo, is an aged general from the Stroessner epoch with the expression of a genial toad. He repeats the old fascist mantra of "God, Fatherland, and the Family", which now sounds rather dated in Latin America, but he has a considerable following among the poor and the lower middle class. I watched while his supporters paraded with horse-drawn carts, a reminder of Paraguay's still substantial rural population, and fierce-looking young men revved up their motorbikes. Oviedo held his final rally beside the splendid all-white Greek temple where the 19th century heroes of the fatherland are commemorated, before moving on to pray at the great basilica in the suburbs of the Virgin of Caacupe.

Yet on this occasion it seems that God may be on the side of the bishop.